SBI Mutual Fund announces floating rate fund

Mumbai: SBI Mutual Fund, one of the leading mutual funds in the country on Wednesday launched a new fund, 'MMIP Floater Fund' which would seek to offer consistent and steady returns by investing in floating rate instruments and protect the investment from the risk arising out of interest rate fluctuations.

MMIP Floater Fund is an ideal investment avenue for retail and institutional investors including corporates, banks and financial institutions with low risk tolerance.

The fund is open for subscription upto November 30, 2005. The scheme will have a minimum application amount of Rs10,000. The MMIP Floater Fund will charge no entry load, however, exit load will be charged as applicable.

The fund would invest about 85 per cent to 100 per cent in debt and debt-related instruments including derivatives with the focus being on instruments that have longer tenor benchmarks and resets. The fund would also invest up to 15 per cent in equity and equity related instruments where the focus will be on large cap liquid stocks without sectoral bias, which generates value over medium and long term.

According to P G R Prasad, MD and CEO, SBI Mutual Fund, "MMIP Floater Fund offers an attractive investment option for retail as well as institutional investors including corporate, banks and FIs in the existing uncertain interest rate scenario. The fund would seek to invest in floating rate instruments, which would help in de-risking the portfolio from the losses arising out of adverse price movement. The focus thus would be on instruments which have longer tenor benchmarks and resets."